This invention relates to field of payment processing, and more specifically to a system of processing partial authorizations, partial deposits, and full deposits. The system provided as a software as a service (SaaS) billing solution.
In the payment industry, increasing the average success rate of both real-time or initial transactions and subscription or recurring transactions (which are also known as forced deposits) is important. Certain merchant processing entities allow sophisticated subscription businesses to override the denial of an authorization from the issuing bank for a given transaction if that transaction was in certain reason codes.
This can occur for attempted transactions where the account was over their credit limit. A drawback of this approach is that some debit and credit issuing banks consider the practice unfriendly to their cardholders and the issuing banks would then issue chargebacks for any transaction deposited in this manner. As subscription or recurring and virtual goods merchants tend to have a chargeback rate close to the 1 percent of transactions ceiling set by the card associations, it is difficult for a merchant to run the risk of additional chargebacks generated by these deposits while remain below 1 percent of monthly transactions becoming chargebacks.
With the rise of card association branded stored value cards, the card networks have added new functionality to the payment networks to support these new card types. An added functionality is called partial authorizations. The payment network supports allowing consumers use the remaining balance on a prepaid or stored value card even if the consumers were unsure of the remaining balance.
Partial authorizations are typically handled: when a consumer attempts to use a prepaid card either in a store or online, the merchant would receive a middle response between authorized and not authorized when that card account would not fully authorize for the total amount requested but would authorize for a lesser amount. The merchant can use this partial authorization data to then inform the consumer that some portion of the check out cost can be placed upon the prepaid card and inform the consumer how much more would have to be presented using another card or payment instrument. This allowed the pre-paid card to be fully used up.
As the payment industry continues to evolve and features such as partial authorizations and others become available, there is need for improvements in payment processing and the software for such processing to increase the success rate and payment flow for transactions.